Posted inHong Kong

China AMC product becomes largest A-share ETF in Hong Kong

Investors have been attracted to CSI 300's broader holdings.

The ChinaAMC CSI 300 Index ETF has become the largest China A-share ETF listed in Hong Kong, overtaking Blackrock’s iShares FTSE A50 China ETF, according to a Bloomberg report.

Assets in the China AMC product currently stands at HK$21.57bn ($2.78bn), while the Blackrock ETF has assets of around HK$20bn, data from the Hong Kong Exchanges and Clearing (HKEX) shows.

Since last week, the China AMC ETF had net inflows of $125.m, according to data provided by the firm.

The Bloomberg report said that investors have shifted to China AMC’s ETF partly to avoid US sanctions. Investors have also been attracted to the CSI 300’s broader holdings, compared with the FTSE A50’s finance-heavy constituents, the report added, quoting Max Lan, a Hong Kong-based portfolio manager at China AMC.

“While our ETF products with Chinese firms in the investment ban are not suitable for US investors at the moment, either, we have seen strong demand from non-US investors, from countries in Asia and Europe,” Lan told Bloomberg.

Blackrock in Hong Kong announced last week that it will not make any further purchases of Chinese stocks that were included to the list of companies sanctioned by the US.

The decision affected the firm’s the Hong Kong-listed iShares Core CSI 300 ETF and iShares Core Hang Seng Index ETF, which are sub-funds of the iShares Asia Trust. However, it does not mention that its FTSE A50 ETF was affected.

“The Underlying Index of each sub-Fund contains constituent securities of entities that are identified by the United States government as sanctioned entities. In light of the Executive Order, each Sub-Fund will not make any new investments in a sanctioned entity with effect from 11 January 2021,” Blackrock said.

Part of the Bonhill Group.